The Consumer’s Right of Withdrawal
Businesses compete not only with their goods and services but also with their sales terms. By giving customers e.g. the possibility to return products if not satisfied, companies may become more attractive. In this blog post in our series on consumer protection, we will examine under what circumstances consumers are entitled to a cooling-off period and what it entails. Please note that the below is only a general outline of rules applicable to Swedish B2C-companies that conclude contracts outside of their business premises, e.g. online, and that there are exceptions to what is outlined herein.
The main rule is that the consumer is granted a fourteen-day cooling-off period during which the consumer is entitled to terminate the contract for convenience. In relation to goods, the period starts from the day the consumer receives the goods and in relation to services, the day the agreement was signed. A pre-requisite for the cooling-off period to start is nevertheless that the business has informed the consumer of there being a right of withdrawal, how long the cooling-off period is, what steps to take in order to invoke it and inform the consumer that there is a standardized form that may be used when invoking it. How and when the information is to be provided depends on how the contract is entered into but on a general level it can be said that the information must be provided in a clear and comprehensible manner prior to the consumer entering into the agreement. Failure to provide the information in a compliant manner entails an extension of the cooling-off period up until the earlier of (i) the information is provided, and (ii) one year after the cooling-off period would have ended if the information would have been provided in a compliant manner.
Some goods and services are exempted from the right of withdrawal, e.g. goods specifically produced for the consumer that has a strong, personal character, like family photos, or goods that quickly may deteriorate/expire such as fresh fruit. Another example of where there is no right of withdrawal is where digital content is delivered on something else than a physical medium, e.g. by renting a film from an online provider, and the consumer has expressly agreed to the form of delivery and there being no right of withdrawal.
If the consumer chooses to exercise its right of withdrawal, it shall return the goods without undue delay but no later than fourteen days from exercising such right. The main rule is that, unless otherwise agreed and provided that the business has complied with its information obligations in relation to such costs, the consumer shall pay for the cost of sending back the goods.
The payment shall be returned without undue delay but no later than fourteen days from when the notice of the consumer exercising its right of withdrawal was received by the business. Unless the business shall pick up the goods itself, the repayment for goods does however not have to be done until the business receives the goods or the consumer shows that the goods have been sent back. Unless otherwise has been agreed, the means of repayment shall be the same as the consumer used when making the original payment. The consumer may under certain circumstances be liable to compensate the business for e.g. services already performed and the decreased value of the goods, but such liability requires among else the business to have provided the consumer with certain information regarding such liability before the contract was entered into.
Offering customers a right of withdrawal may be cumbersome and it is important, when setting up the business to have routines in place in order to ensure a compliant processing of consumers exercising their right of withdrawal, in everything from how the terms and conditions are worded to how repayments are made. If you have questions about the right of withdrawal or would like to know whether your business is compliant with applicable regulations, don’t hesitate to contact Synch at firstname.lastname@example.org. This post is a part in our blog series on consumer protection. Make sure to also check out the other posts in this series.